The manufacturer’s liability for a defective product is one of the most widely discussed topics in recent years, above all due to the considerable potential economic damage.
 
DEFECTIVE PRODUCTS ON THE EUROPEAN AND NORTH AMERICAN MARKETS
by Enrico Fabbri
 
Generally, a ‘defective’ product or service is one that causes unreasonable damage to the end user, whether a passenger or operator. Even if the concept seems quite intuitive, it’s framing in European and North American (US) legislation is not so straightforward.

Undoubtedly, a product has to comply with the minimum requirements established by the relevant standards (EN and ASTM), however this alone does not indemnify a manufacturer or operator if an accident causes personal harm. From a technical viewpoint, the person suffering the damaged is almost never considered at fault, rather it is the manufacturer or operator who is liable, generally for not having identified the danger that caused the damage in a timely manner.

In almost all European countries, the procedure for identifying liability involves a court case and then a civil lawsuit to determine the sum of the compensation to be paid. On the North American market, on the other hand, accidents almost never lead to criminal court cases, rather the parties initiate a civil lawsuit and usually reach a settlement before the trial starts. Experiences in recent years lead to the conclusion that blame and thus liability is almost always shared between manufacturer and operator. To reduce the risk of damage, manufacturers and operators need to ‘reasonably’ upgrade their designs and procedures, keeping account of the evolutions in the perception of danger, the current technology available, and historical information (for example, relating to other accidents). The procedures for assessing risk reduction are clearly illustrated in EN-1050.

The risk of being held liable for most of the damage increases when the manufacturer or operator is accused of ‘negligence.’ This occurs when one of the parties is considered to have been unreasonably inactive in responding to dangers that are reasonably known, not warning customers and consequently causing unreasonable damage to a third party. A classic example of negligent behaviour is a manufacturer who, following an accident, fails to warn other customers of the danger and does not adopt reasonable corrective actions.

Another example of negligence is when a passenger on a dodgem car is injured due to the absence of safety belts, and the operator subsequently fails to install them, thus exposing other passengers to harm. These types of behaviour are generally punished significantly by judges, who award “extra damages” to the claimant, sums that may even reach 20 percent of the company’s sales. Such compensation payments are usually not covered by insurance policies and thus have to be shouldered by the business. These concepts are deeply established above all on the US market, and have become famous for due to legal costs involved and the sums paid out, especially when negligence is proven. Naturally, the same concepts are also applied in Europe, albeit with lesser effects and limited by legislation.

I should also underline that the requirement to update a ride, usually the manufacturer’s responsibility, becomes the operator’s responsibility if the manufacturer is no longer in business. Considering that a ride manufactured in Europe could, for example, be used in any part of the world, it is worth highlighting the following points:
• the liability of a manufacturer for a product used in the USA never expires, even if sold indirectly;
• an adequate insurance policy is always required, and should cover the USA;
• the manager of a business, as well as the employees, may be held liable for damage, both at a criminal and civil level, even when the business is no longer operating;
• a major accident almost always involves termination of the insurance policy, and consequent difficulties for the business to stipulate a new insurance policy.

 

 

 

Written by Mr. Enrico Fabbri enrico@fabbrirides.com
Article originally published in Games Industry (Italy) magazine
Original date: August 2015

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